Guest Blogpost from Richard Lynch: It’s time to make a breakthrough on pay

Things are finally beginning to look up on pay in the private sector, with January settlements higher than they have been for several years and the gap between pay and price increases now down to below 1%.

The average settlement figures for the three months to end January 2012 have also improved with Income Data Services and Labour Research Department both putting the going rate at 3%, compared to 2.5% in the three months to end December 2011. Figures from XpertHR (previously Industrial Relations Services) are unchanged at 2.5% but they also see clear signs of recovery in the pay market.

According to IDS, the most common settlement level (or ‘mode’) is now 3% but nearly a third of settlements have been at or above 4%. LRD figures also show 3% as the most common award but they have highlighted a number of significantly higher settlements including 5.5% in Rolls Royce, 6% in Ford and 6.1% in Jaguar Land Rover. And despite the fact that their latest quarterly figures are unchanged, XpertHR are also saying that the most common basic award is now 3%, with almost half of all increases pitched at that level or higher. In addition they are saying that almost half of all current awards are higher than those made in the same companies last year, with 35% at the same level and 24% lower.

Average total pay, according to ONS, is now £465 a week (£24,180 a year) and average regular pay is £439 a week (£22,828 a year). Average full time pay, according to LRD, is £612.20 a week (£31,834.40 a year).

In the public sector, however, there are still widespread pay freezes, and 1.6 million local authority workers in England, Wales and Northern Ireland have recently been told that their pay will not rise by 1% in the next round, as had been indicated, but will instead be frozen for a third year in succession. And this despite the fact that, when inflation is taken into account, real pay for local authority workers has declined by 13% between April 2009 and February 2012 (according to UNISON) and more than a quarter of the mainly female workforce now earn less than the living wage of £7.20 an hour, with many having to rely on tax credits to survive.

With private sector pay now beginning to rise again, the gap between what is being paid in the sectors is widening further. It is hard to see public sector workers accepting this for much longer and a more assertive approach to pay seems inevitable from the six million people who work in that sector.

But private sector workers also need to be more assertive as they cannot afford to assume that things will continue to improve for them. The higher January figures were heavily influenced by settlements in the better-paying manufacturing sector and there is no guarantee that these will be replicated or improved upon in coming months.

The time has now come for all workers, whatever sector they are in, to make clear that they will not accept further austerity on pay and will instead fight for increases which will maintain their living standards and help them to make up the ground they have lost over the past number of years. Remember, there has been no austerity for captains of industry while you have been tightening your belts, most big companies are comfortably cash rich and if you have more to spend you will be helping economic growth and putting people back to work.

With the most important pay review date of the year coming up in April, it’s now time to start fighting to win; it’s time to make a breakthrough on pay. Let’s do it!

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

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